Sydney, August 18, 2025 – Australia’s competition watchdog, the Australian Competition and Consumer Commission (ACCC), has secured a settlement with Google that marks a significant regulatory pushback against its dominance in digital services. Google has agreed to pay A$55 million, or roughly US$35.8 million, to settle claims it entered into anti-competitive agreements with the country's two largest telecom operators—Telstra and Optus—forcing pre-installation of Google Search on Android phones and suppressing rival search engines.
The Deal and Its Implications
Between December 2019 and March 2021, Google made agreements with Telstra and Optus under which Android devices sold by these carriers came with Google Search pre-installed as the sole search engine. In return, the telcos received a share of advertising revenue generated from searches made on those devices.
The ACCC concluded that these agreements substantially lessened competition in Australia’s search engine market by blocking rival options and narrowing consumer choice.
Acknowledging the impact, Google admitted liability. The company and the ACCC jointly submitted to the Federal Court that the A$55 million penalty is appropriate, although the court must still officially approve it.
Why This Matters
ACCC Chair Gina-Cass Gottlieb said the resolution “creates the potential for millions of Australians to have greater search choice in the future, and for competing search providers to gain meaningful exposure to Australian consumers”.
In addition to the fine, Google has offered a court-enforceable undertaking to remove pre-installation and default search engine restrictions from future contracts with Android device manufacturers and carriers. Telstra, Optus, and a smaller rival, TPG, have also agreed not to enter into such exclusive arrangements going forward.
The Settlement in Context
This comes amid a wave of scrutiny of Google’s practices in Australia. Just last week, a federal court largely sided against Google and Apple in a separate lawsuit brought by Epic Games, raising further questions about platform power and innovation control. Additionally, YouTube has been newly included under social media restrictions banning users under 16, reversing a prior exemption and further tightening regulatory controls over Google's services.
Google’s Response
A Google spokesperson expressed satisfaction in resolving the issues with the ACCC, noting that the contested provisions had not featured in recent commercial agreements. The company affirmed its commitment to giving Android manufacturers more flexibility in preloading apps—including browsers and search tools—while maintaining a feature set designed to help devices compete with Apple and remain affordable.
The Road Ahead: Federal Court and Market Effects
While Google and the ACCC have agreed on the penalty, it's not final until the Federal Court ratifies it. Legal analysts expect the court to consider both the settlement’s precedent-setting value and Google's pledge to change contract practices.
Critically, this settlement underscores growing global concern over default settings and preloaded apps that enhance the grip of dominant platforms on markets. As AI reshapes the search landscape, regulators are increasingly keeping a wary eye on how defaults can stack the deck, even in nascent forms of competition.
Wider Significance for the Digital Ecosystem
Australia’s action against Google reflects broader regulatory shifts, not just locally but globally, as digital markets mature and competition authorities push for fairer conditions. For consumers, this spells the potential return of choice—whether that means a moment of discovery with a lesser-known search engine, or access to innovative AI-powered alternatives.
For rivals, it opens a window for visibility in app stores and device settings, levels otherwise heavily skewed in favor of incumbents. And for regulators, it's a reminder that tech platforms—once considered untouchable—can be shaped by well-executed oversight.
Final Thought
Google’s A$55 million settlement is more than a financial adjustment—it’s a shift in how digital defaults are regulated. By cracking down on exclusive pre-install agreements, Australia may be setting a tone for future efforts to ensure that competition, not contractual convenience, determines what consumers see first.
The case makes clear: competition authorities are no longer content to watch quietly. And as AI powers the next wave of search innovation, ensuring fair access to consumers means keeping an eye on even the smallest default setting.
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